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EID Parry (India) Ltd.

BSE: 500125 | NSE: EIDPARRY |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE126A01031 | SECTOR: Sugar

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Annual Report

For Year :
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Director’s Report



Dear Shareholders,

The Directors have pleasure in presenting the Forty Second Annual Report together with the audited financial statements for the year ended March 31, 2017.


Rs, in Crore








Gross Revenue





Profit Before Interest and Depreciation (EBITDA)










Profit Before Interest and Tax (EBIT)





Finance Charges





Net Profit Before Tax





Tax - Expenses





Net Profit After Tax before minority interest





Minority Interest





Net Profit After Tax after minority interest





Balance of profit brought forward





Transfer from Debenture Redemption Reserve (Net)





Balance available for appropriation





Indian Accounting Standards (IND AS)

The Ministry of Corporate Affairs (MCA) vide its notification in the Official Gazette dated February 16, 2015 notified the Indian Accounting Standards (Ind AS) applicable to certain classes of Companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. Ind AS is applicable for the Company from April 1, 2016, with a transition date of April 1, 2015 and IGAAP as the previous GAAP

The following are the areas which had an impact on account of transition to Ind AS :

- Business combination including recording of intangibles and deferred taxes and accounting for common control transactions

- Fair valuation of certain financial instruments

- Employee costs pertaining to defined benefit obligations

- Discounting of certain long-term liabilities

- Share based payments

The reconciliation and description of the effect of the transition from IGAAP to IND AS have been provided in Note 55 & 54 in the notes to accounts in the standalone and consolidated financial statements respectively.

Consolidated Operations

Consolidated Revenue of your Company for the year was Rs, 14,826 Crore 5.88% lower than Rs, 15,753 Crore in the previous year. Overall expenses for the year was Rs, 13,906 Crore as against Rs, 15,458 Crore in the previous year. Operating Profit (EBITDA) was Rs, 1,585 Crore as against Rs, 1,020 Crore in the previous year. Profit after Tax and minority interest for the year at Rs, 521 Crore, was Rs, 486 Crore higher over Rs, 35 Crore in the previous year.

Standalone Operations

Standalone Revenue of your Company for the year was Rs, 2,631 Crore, 5.56% lower than Rs, 2,786 Crore in the previous year. Operating Profit (EBITDA) was Rs, 509 Crore, as against Rs, 158 Crore in the previous year. Profit after Tax (excluding exceptional item) for the year was at Rs, 284 Crore as against loss after tax of Rs, 92 Crore for the previous year. Reduction of total debt is important to improve the Company’s risk profile and increase sustained earnings. Total debt was reduced from Rs, 1,319 Crore as of March 2016 to Rs, 943 Crore in March 2017. This enabled the Company to reduce interest/finance charges to Rs, 140 Crore as compared to Rs, 167 Crore in the previous year.


The improved performance of the Company was largely on account of better sugar prices, which have been on an upswing since August 2016, after touching all time lows in the previous two years. More than 90% of the Company’s revenue comes from the sugar business and hence the sugar prices play a predominant role in determining the profitability of the Company. Higher profitability has been achieved notwithstanding lower cane crushed, lower sugar produced and sold as compared to the previous year, due to better sugar prices and a host of other initiatives taken by the Company to improve profitability.

Product Differentiation

In terms of sales and marketing, the Company has focused on product differentiation and value addition to the customer to improve realizations. The Company is one of South India’s leading suppliers of sugar to the Institutional segment. Currently the Company services varied sectors such as carbonated drinks, beverages, juices, confectionery, dairy, biscuits, ice creams, ketchups and Indian sweets across 15 States. The Company is also focussed on supplying sugar to the Pharma Industry which requires customized sugar to meet their specific product requirements. The Company has recently commenced sale of Bonsucro certified sugar, produced from sustainable sugarcane. Over 40% of Company’s sugar volumes have been sold to the Institutional segment. The Company’s retail product Amrit, a 100% original cane sugar product, with about ten times the nutrients as compared to normal sugar, is growing and is being extended to more towns in South India.

Manufacturing Excellence

The focus of the Company has been on driving cost optimization across the entire conversion cost chain. Improvements in daily crush rate, better efficiencies on steam, energy and chemicals consumption besides reduction of total losses have all helped in maintaining and improving profitability. The ongoing TPM initiative at the Company’s two Units will enable the Company to achieve Manufacturing Excellence in all its operations over the next few years. Safety has been on top of the agenda across all the Factories. Some of the areas covered under the Safety program include Standard Operating Procedure and work instructions for critical jobs such as working at heights, hot work, confined space entry and electrical work; more safety visuals and safety patrols; improved 1S & 2S; rigour in implementation of safety permit system and development of accident matrix with corrective actions. Sustainability initiatives implemented during the year include Zero Water Drawal from ground, river or canal; online monitoring of emission and effluent parameters; production of Potash fertiliser as part of “Waste to Wealth” initiative and conversion of Bio Methanated Distillery spent wash to Potash rich powder, to name a few. The technology of bagasse dryer system using flue gas for reducing the bagasse moisture has been perfected. Turbines at Nellikuppam and Haliyal were overhauled with specific focus on improving specific steam consumption. New concept such as Saturated Steam Turbine was commissioned at one plant. The Sankili Plant at Andhra Pradesh also commenced trial production of Ethanol from Sweet Sorghum grown by the farmers within the command area. The Nellikuppam refinery was upgraded to meet stringent pharma standards of production. The Company’s Distillery at Nellikuppam is amongst the first in India to be given the permission to run for 350 days with a zero liquid discharge system in place. Continued improvements in quality and food safety of the products, across all the locations, have been another area of focus.


Although the Company has benefited from improving sugar prices in the wake of lower sugar production, the sugarcane availability was a major concern for the year. Improved sugarcane availability is important for sustaining and growing the profitability of the sugar business. The lower sugarcane crush in Tamil Nadu was mainly on account of lower yield due to a very serious drought. Tamil Nadu, across many of its Districts, witnessed the lowest rainfall in 2016 in the last hundred years. The problems were further exacerbated due to non availability of water for irrigation from the Cauvery river. During the year under review, the cane crushed by the Tamil Nadu Plants was at 24.61 LMT as against 23.46 LMT in the previous year. The daily crush rate at 14291 TCD was better than the actual of 13340 TCD achieved in the previous year. The average recovery was at 8.89 % as against 9.14% in the previous year. The situation in AP was no different with much lower rainfall in

2016. In Karnataka too, the Company crushed less cane than the previous year due to lower yield because of a poor South West monsoon, combined with farmers diverting cane due to fear of perishables, if not harvested in time. In Karnataka / Andhra Pradesh, the overall cane crush came down from 32.43 LMT in the previous year to 19.83 LMT in the current year. While the average crush rates were maintained at about the previous year’s levels, the number of crush days came down from 188 to 102, in Karnataka. The average recovery was at 10.75 % & 9.67 % in Karnataka & Andhra Pradesh as against 11.53 % & 9.37 % in the previous year respectively. During the year, the Sugar Units of the Company in Karnataka commenced operations earlier to ensure maximum crushing during the season but unauthorized cane poaching in the light of restricted cane availability, led to the Company losing cane to competition. This combined with lower yield resulted in early closure of the season.

The Company has launched a number of initiatives like cooperative farming, providing resources for drip and micro irrigation besides partnering the farmers through various activities such as trash shredding and mulching, foliar application of potash, supply of seed through a three tier nursery programme, intercropping, wider row spacing, gap filling, desalting of ponds, new varietal trials, release of bio control agents, mechanization of agronomy practices, training programmes, village meetings, improved farmer connect, etc. to improve yield, reduce cost of cultivation and thereby improve the economic wellbeing of the farmers.

For the Sugar Season 2016-17, the Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution, fixed the sugarcane Fair & Remunerative Price (FRP) at Rs,230/quintal for a basic recovery of 9.5% and a premium of Rs,2.42 for every 0.1% increase in the recovery rate, as recommended by the Commission of Agricultural Costs and Prices (CACP). The Company has paid cane prices higher than FRP across all the three States. The Company is committed to provide a fair share of its revenue to the farmers. While the link between the revenue and the sugarcane price has been made possible in sugar season 2016-17, due to improved sugar prices, it is important and in the interest of both the farmers and mills that this umbilical link between the revenue and the sugarcane price is established and maintained going forward. The Central Government must continue the policy of a price stabilisation fund, which was in place with cess being collected on sale of sugar from February 1, 2016. This will ensure that the farmer gets a minimum price protection by way of FRP a bonus by way of Revenue Sharing Formula when sugar prices are higher and payment of FRP including contributions from the price stabilisation fund, when sugar prices are lower. Unarguably, this is the only way in which cane price arrears can be avoided in a cyclical industry like sugar during downtimes.

All India Sugar Production and Government Policies

The Sugar Industry has witnessed challenging times with volatile sugar prices over the two previous sugar seasons, ending sugar season 2015-16. This was mainly because sugar production on an all India basis continued to outstrip sugar consumption levels over previous five consecutive sugar seasons. With mounting stocks, the sugar prices started declining from May, 2015. However, the situation changed in sugar season 2016-17 with Indian sugar production estimated at 20.3 million tonnes and over all consumption at about 24 million tonnes. The decline in sugar production in 2016-17 can be primarily attributed to drought and consequently, lower sugarcane in the States of Maharashtra and Karnataka. The Government at the Centre has played a key role in turnaround of the fortunes of the Sugar Industry. It swiftly responded and introduced various actions and measures to alleviate the problems of mounting cane arrears and poor financial performance of the sugar mills. In the previous year, the Government introduced measures like soft loan schemes, production subsidy, mandatory export and Ethanol blending programmes to improve the profitability of the sugar mills and speed up cane payments to the farmers. Once the sugar prices improved to the desired levels, the Government reacted promptly with imposition of stock holding limits at the trader level and mill level, withdrew production subsidy, imposed export duty and withdrew the excise benefit on ethanol supply for blending. It also brought in changes in metrology rules and empowered itself to fix the retail prices of essential commodities. The Government of Karnataka also pitched in by waiving purchase tax on sugarcane in the financial year 2016-17, provided the Mills cleared their cane arrears of previous years by June

30, 2017 and also undertook to pay a part of the disputed cane price pertaining to SY 2013-14.

During the year, the Bio Pesticides division of the Company was severely impacted by significant increase in neem seeds price from previous year levels due to season failure across southern India combined with increased competition. This unprecedented price increase has adversely impacted the profitability resulting in 45% drop in operating profits in spite of 22% growth in revenue over previous year. To mitigate the risks relating to the seeds availability, the business has taken measures over short term and long term horizon. The Company expects that these measures would bring stability in the operations of the business. Parry’s Azadirachtin, with the highest purity and best stability, continued to command a premium and maintain its leadership position both in the agriculture and indoor garden segments. As a critical part of the future ready strategy for growth, work is in progress to foray into the ‘Microbial segment’. The Company has undertaken a detailed study across the globe, on major crop pest problems and identified the critical ones for which it would work to identify patentable microbial solutions. Major factors such as toxicity, safety to users and consumers, eco friendliness, sustained and assured protection, low/no pre-harvest interval etc., are the objectives that Parry’s Bio Products division envisages to achieve through its vision of being a Global Bio Products Business offering Organic solutions for Sustainable Crop Protection and Growth.


During the year, overall sales of premium Organic Spirulina increased by 22% over previous year mainly due to improved sales in European market where premium quality continues to be valued. Spirulina production from the new Greenfield unit established at Saveriarpuram, Tamilnadu had commenced during Q4 of previous year and stabilised well during the year. The Nutraceuticals Division had made investments during the year to stabilize the Chlorella production process by achieving 20 MT production. Further investments are committed for process improvements and scale up of Chlorella volumes in the next financial year. The division has received the U.S. Food and Drug Administration (US-FDA) approval for its Oonaiyur facility for organic microalgae cultivation and processing. It is a testament to the Company’s on-going commitment to maintaining superior quality systems. This approval will further enhance the Company’s reputation as a leader in micro-algal technology. During the current year, Parry’s Spirulina received R.A.W and C.L.E.A.N certification from Integrated systems, USA.

Alimtec SA, Chile which was acquired by the company in 2014 is shaping well and recorded 64% growth in production volumes during the year. Further, the business has invested in a window dryer during the year to improve the production quality. We expect this investment to yield desired results in Alimtec’s performance during the next financial year.

US Nutraceuticals LLC, our USA based subsidiary has achieved a sales of USD 23.8 MN during the current year against USD 25.8 MN of previous year. Sales of formulation products has shown a degrowth of 24% over previous year. The company has been investing in clinical trials for developing new formulations. We expect these investments would improve the Company’s performance in the next financial year.

Dividend And Reserves

During the year, the Company paid an interim dividend of Rs,4/- (400%) per equity share of Rs,1/- each in March, 2017.

The company has not transferred any amount to the reserves for the year ended March 31, 2017.

Amalgamation of Subsidiary

The Scheme of Amalgamation of Parrys Sugar Industries Limited, a subsidiary with the Company was approved by the NCLT, Chennai Bench on April 21, 2017. Similarly the Petition of Parrys Sugar Industries Limited was approved by the NCLT, Bengaluru Bench vide its Order dated April 21, 2017. Consequent to filing of the certified order copies along with the Scheme with the respective Registrar of Companies on April 25, 2017, the Scheme became effective from April 25, 2017 with appointed date of April 1, 2016.

Share Capital

The Paid up Equity Share Capital of the Company as on March 31, 2017 was Rs,17.59 Crore. During the year under review, the Company allotted 56,014 equity shares on exercise of stock options under ESOP Scheme, 2007.

Consequent to the Scheme of amalgamation of Parrys Sugar Industries Limited (PSIL) with the Company becoming effective, the share capital will increase to Rs,17.69 Crore after allotment of shares to the shareholders of PSIL in accordance with the said Scheme.

Subsidiary Companies

There has been no change in the nature of business of the subsidiaries during the year under review. In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company and all its Subsidiary Companies, which is forming part of the Annual Report. A statement containing the salient features of the financial statements of the Subsidiary Companies, Joint ventures and Associates are given in Annexure-A to this Report.

In accordance with the provisions of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company containing standalone and consolidated financial statements has been placed on the website of the Company, Further, the audited accounts of the Subsidiary Companies and the related detailed information have also been placed on the website of the Company The annual accounts of the Subsidiary Companies will also be available for inspection by any shareholder/debenture trustees at the Registered office of the Company and of the Subsidiary Companies concerned during working hours upto the date of the Annual General Meeting. A copy of annual accounts of subsidiaries will be made available to shareholders seeking such information at any point of time.

Performance of Business Segment Sugar

During the year, the sugarcane crush dropped from 55.90 LMT in the previous year to 44.44 LMT in 2016-17. The overall recovery also dropped from 10.30 % in 15-16 to 9.61 % in 2016-17, largely because of lower sugarcane crushed in Karnataka. Lower sugarcane crushed as stated, is largely on account of drought conditions leading to lower yield across all the three Southern States of Tamil Nadu, Karnataka and Andhra Pradesh and diversion of cane to competition in Karnataka. Consequently the sugar production was lower at 4.33 LMT this year. The Company sold 4.78 LMT during the year. The Company however maintained the sales to Institutions at about the same volumes as in the previous year, while improving on the retail volumes. The average realization of sugar was up from Rs,24.80 /Kg. in 2015-16 to Rs,34.30 /Kg. in 2016-17. The higher sugar prices along with focus on product differentiation and Manufacturing Excellence programmes resulted in improved profitability of this segment.


The Cogen Units in TN generated 3,006 Lakh Units as against 3,284 Lakh Units of the previous year. With the overall power situation improving dramatically this year and with inter-connection of grids, power tariff rates dropped and the Company entered into a short term power supply arrangement with the Tamilnadu Government Electricity Utilities in December 2016.

The Karnataka and Andhra Pradesh Units generated 2,533 Lakh Units as against 3,237 Lakh Units in the previous year. Along with the other Mills of the Karnataka Sugar Industry, a five year Power Purchase Agreement was entered into by the Bagalkot and Haliyal units with the Karnataka Government Electricity Utilities in January 2017.


With own and bought-out molasses, the two Distilleries in Tamilnadu ran for over 330 days on an average and recorded highest production to-date of distillery products. The Company produced 708 LL of Alcohol during the year as against 657 LL of Alcohol during the previous year, an increase of over 8%. The Company completed the process of expansion of its Ethyl Neutral Alcohol production facility from 30 KLPD to 75 KLPD at Nellikuppam. The Company supplied over 5% of Ethanol used by the Oil Marketing Companies in South India for blending with petrol in 2016-17. Consequent to higher production / sales volumes and improved realizations of the distillery products, the division registered an increase in both revenue and operating profits during the year 2016-17.

The Bio-Pesticides Division registered a revenue of Rs,122 Crore as compared to Rs,100 Crore in the previous year, accounting for 5% of the Company’s revenue. The sale of Aza Products registered a growth of 15% over 2015-16. Export sale of Neemazal Technical registered a growth of 17% over 2015-16. USA accounted for 63% of Export sales, while Europe and Asia accounted for 33% and 4% respectively. Domestic sales registered a growth of 22% over

2015-16 enabled by growth of Aza & Non Aza products by 10% & 31% respectively. PBIT for the year was at Rs,14.7 Crore against Rs,26.73 Crore in 2015-16. Parry America Inc, wholly owned subsidiary of the Company, registered sales of Rs,57 Crore with 12% growth over previous year. On a consolidated basis the Bio-Pesticides Business registered a revenue of Rs,123 Crore in 2016-17 as compared to Rs,107 Crore in the previous year, registering 22% growth over previous year.


The Nutraceuticals Division’s standalone revenue was at Rs,71 Crore in 2016-17 as compared to Rs,77 Crore of previous year representing 3% of the Company’s revenue. About 84% of this represents exports. US Nutraceuticals LLC registered sales of Rs,163 Crore which represents a degrowth of 6% over the previous year. Alimtec SA registered sales of Rs,11 Crore as compared to Rs,4 Crore in the previous year. On a consolidated basis the Nutraceutical Business registered revenue of Rs,228 Crore as compared to Rs,240 Crore in the previous year.

A detailed analysis on the business segments is included in the “Management Discussion and Analysis” Report, which forms part of this Report.

Awards & Recognitions

During the year, the Company was selected in 2016 as the best performing Company and winner in the sugar sector by Dun & Bradstreet, for the second year in running. Dun & Bradstreet has endeavoured to provide the top Indian Companies a global platform through its publication of India’s top 500 Companies to recognise exemplary performance in the Corporate World. Further, the Company received a special recognition at the National level in May 2017 for its “Commitment to Engagement” as part of the Aon Best Employers India 2017.

At the National level Energy Conservation Contest organized by the Confederation of Indian Industry, the Company’s Nellikuppam factory was certified as an “Excellent Energy Efficient Unit” and Pudukottai factory was certified as an “Energy Efficient Unit”. Both Nellikuppam and Pudukottai Units received this award for the second and third time respectively in the last four years. The Pudukottai Unit also received first prize for Jishu Hozen activities at the National Level TPM Circle Competition.

The Nellikuppam factory received an Award for “Best Overall Performance of the Sugar Mill” from a Sugar Manual Magazine and

Haliyal Cogen Plant was awarded as the “Best Safe Power Boiler’ in Karnataka State by the Government of Karnataka. Further, the Plants at Nellikuppam, Sivaganga, Sankili, Haliyal and Bagalkot won 10 Awards from South India Sugarcane and Sugar Technologies Association (SISSTA) under the heads of “Best Distillery”, “Best Technical Efficiency” “Best Sugarcane Development”, “Best Cogeneration” and “Best By-products” .

Directors’ Responsibility Statement

Pursuant to the provisions contained in Section 134(3) of the Companies Act, 2013, your Directors to the best of their knowledge and belief and according to information and explanations obtained from the management, confirm that:

- In the preparation of the annual accounts for the financial year ended March 31, 2017, the applicable accounting standards have been followed and there are no material departures from the same;

- The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that-date;

- The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The Directors have prepared the annual accounts on a going concern basis;

- The Directors have laid down proper internal financial controls to be followed by the Company and such controls are adequate and operating effectively and

- The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Directors And Key Managerial Personnel

Mr. S.Suresh was appointed as Deputy Managing Director of the Company for a period of three years as approved by the members on August 5, 2016.

Mr. V.Ramesh was re-appointed as Managing Director of the Company for a period of one year with effect from January 30, 2017 as approved by the members by way of postal ballot on January 23,


Mr. Anand Narain Bhatia, independent Director, who was appointed on July 30, 2014 for a period of three years would be retiring on July 29, 2017.

The Board of Directors accepted the request of Mr. V.Ramesh, Managing Director seeking early retirement and accordingly Mr. V.Ramesh would be retiring from the position of Managing Director as well as Director of the Company on the close of the business hours of July 31, 2017.

Consequent to the early retirement of Mr. V. Ramesh as the Managing Director w.e.f July 31, 2017, the Board at their meeting held on May 18, 2017, on the recommendation of the Nomination & Remuneration committee (NRC) appointed Mr. S.Suresh, the Deputy Managing Director as the Managing Director of the Company for a Period of five years w.e.f August 1, 2017. His appointment will be subject to the approval of the shareholders at the ensuing Annual General Meeting.

The Board wishes to place on record its appreciation for the valuable contribution made by Mr Anand Narain Bhatia and Mr V Ramesh during their tenure as Independent Director and Managing Director respectively.

As per the provisions of section 152 of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. V.Ravichandran, Director retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for reappointment and the requisite details in this connection is contained in the notice convening the meeting and the Corporate Governance Report.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013 and also comply with Regulations 16 & 25 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).

Mr. V.Ramesh, Managing Director, Mr. S.Suresh, Deputy Managing Director, Mr. VSuri, Chief Financial Officer and Ms. G.Jalaja, Company Secretary are the Key Managerial Personnel of the Company as per section 203 of the Companies Act, 2013.

Number of Meetings of the Board

Nine Meetings of the Board of Directors were held during the year, the details of which are given in the Corporate Governance Report.

Board Evaluation

In accordance with the Companies Act, 2013 and Listing Regulations, the Board has carried out evaluation of its own performance, the performance of Committees of the Board and also the directors individually. The manner in which the evaluation was carried out and the process adopted has been given in the Corporate Governance Report.

Policy on Directors’ Appointment and Remuneration and Other Details

The Board has on the recommendation of the NRC framed a policy for selection and appointment of Directors, Senior Management and their remuneration and also framed the criteria for determining qualifications, positive attributes and independence of directors. The Remuneration Policy and criteria for Board nominations are available on the Company’s website at Policies-Codes.

Auditors And Auditors’ Report Statutory Auditors

M/s. Deloitte, Haskins & Sells, Chartered Accountants, (FR No.008072S) Chennai were appointed as Statutory Auditors of the Company by the shareholders at the 39th Annual General Meeting held on July 30, 2014 to hold office upto the conclusion of the ensuing 42nd Annual General Meeting.

The Board of Directors have recommended the appointment of M/s Price Waterhouse, Chartered Accountants, LLP (Firm Registration No. 012754N/N500016) as Statutory Auditors of the Company in place of M/s. Deloitte, Haskins & Sells, Chartered Accountants, for a term of five years from the conclusion of 42nd Annual General Meeting till the conclusion of 47th Annual General Meeting for the approval of the shareholders of the Company based on the recommendation of the Audit Committee. Written consent of the proposed auditors together with a certificate that the appointment, if made, shall be in accordance with the provisions of section 139(1) of the Companies Act, 2013 read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014 has been received

Cost Auditors

As per the requirement of the Central Government and pursuant to section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company’s cost records are subject to Cost Audit.

The Board of Directors, on the recommendation of the Audit Committee, have appointed M/s. Narasimha Murthy & Co, Cost Accountants, as the Cost Auditors to audit the cost accounting records maintained by the Company for the financial year 2017-18 on a remuneration of '' 10,10,000/- plus applicable tax and reimbursement of out of pocket expenses. A resolution seeking members’ ratification for the remuneration payable to the Cost Auditor forms part of the notice convening the Annual General Meeting.

The cost audit report of the earlier Cost Auditor M/s. Geeyes & Co for the financial year 2015-16 was filed with the Ministry of Corporate Affairs on September 1, 2016. The cost audit report of M/s. Geeyes & Co for the financial year 2016-17 would be filed with the Ministry of Corporate Affairs on or before September 30, 2017 as per the provisions of the Companies Act, 2013.

Secretarial Auditors

The Board appointed M/s. R Sridharan & Associates, Practicing Company Secretaries, Chennai as the Secretarial Auditors to undertake the Secretarial Audit of the Company for the year 2016-17. The Report of the Secretarial Auditors is provided in Annexure-B to this Report.

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory / Secretarial Auditors in their respective reports. The Statutory Auditors have not reported any incident of fraud during the year under review to the Audit Committee of the Company.

Internal Financial Control

The Company has adequate Internal Controls with proper checks and balances to ensure that transactions are properly authorized, recorded and reported apart from safeguarding its assets. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budgets on an ongoing basis.

The Company’s Internal Audit division reviews the controls across the key processes and submits reports periodically to the Management and significant observations are also presented to the Audit Committee for review. There is also a follow up mechanism to monitor implementation of the various recommendations.

Risks, Concerns and Threats

The Company has a Risk Management Committee. As per Regulation 21 of the Listing Regulations, constitution of Risk Management Committee is not mandatory for the Company.

The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board’s Report.

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company’s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels, including documentation and reporting. The Company has formulated a Risk Management Policy.

Corporate Social Responsibility (CSR)

The Company is known for its tradition of philanthropy and community service. As part of its initiative under “Corporate Social Responsibility” drive, the Company has undertaken activities in the field of Education and Healthcare besides other CSR activities for the benefit of community in and around its local areas of operations. The Company is committed to identifying and supporting programmes aimed at:

- Empowerment of the disadvantaged sections of the society through education, access to and awareness about financial services and the like;

- Provision of access to basic necessities like healthcare, drinking water & sanitation and the like to underprivileged;

- Work towards eradicating hunger and poverty, through livelihood generation and skill development;

- Supporting environmental and ecological balance through a forestation, soil conservation, rain water harvesting, conservation of flora & fauna, and similar programmes;

- Promotion of sports through training of sports persons;

- Undertake rural development projects;

The Company has constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013. The CSR Committee has formulated and recommended to the Board, a CSR Policy indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company’s website at www.eidparry. com.

As per the provisions of the Companies Act, 2013, the Company was not required to spend any amount towards CSR activities for the year 2016-17. However, the Company has been actively involved in various CSR activities and an amount of '' 88.04 Lakh was spent during the year. The Annual Report on CSR activities is given in Annexure-C to this Report.

During the year, the Company has bagged the National CSR award under the category of “Best Overall Excellence in CSR” in National CSR Leadership Congress & Awards 2016.

Related Party Transactions

All contracts / arrangements / transactions entered into during the financial year with the related parties were on arm’s length basis and were in the ordinary course of business. There were no materially significant related party transactions with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is available at the web link:

Employee Stock Option Scheme

The Company has introduced Employee Stock Options scheme,2016 during the year 2016-17 as approved by the shareholders. The details of the Options granted up to March 31, 2017 and other disclosures as required under SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the Company’s website at

The Company has received a certificate from the Statutory Auditors of the Company that the Scheme had been implemented in accordance with the Securities and Exchange Board of India (Share Based

Employee Benefits) Regulations, 2014 and the resolutions passed by the Members in this regard.

Corporate Governance

The report on corporate governance along with a certificate from the Statutory Auditors as required under the Listing Regulations is annexed to this Report. The report also contains the details required to be provided on the board evaluation, remuneration policy, implementation of a risk management policy, whistleblower policy / vigil mechanism etc.

The Managing Director and the Chief Financial Officer have submitted a certificate to the Board regarding the financial statements and other matters as required under Regulation 17(8) read with Schedule II of Part B of the Listing Regulations.

In terms of the provisions of Regulation 34(2) of the Listing Regulations, the Management Discussion and Analysis forms part of this Report.

Transfer to the Investor Education and Protection Fund

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the Rules”) all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further according to the Rules, the shares in respect of which dividend has not been encased by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividends. Further, the corresponding shares will be transferred as per the requirements of the IEPF rules, details of which are provided on our website, at http:// investor/Unpaid-Unclaimed-Dividend.

During the year, the Company has transferred an amount of '' 1,07,39,159/- being the unclaimed dividend for the year 2008-09 (Interim and final) and 2009-10 (Interim) to the Investor Education and Protection Fund established by the Central Government.

Adoption of new Articles of Association

The Ministry of Corporate Affairs (MCA) notified most of the sections of the Companies Act, 2013 (“the Act”) which replace the provisions of the Companies Act, 1956. The MCA also notified the rules pertaining to the further notified sections. In order to bring the Articles of Association (AOA) of the Company in line with the provisions of the Act, the Company recommended that the members adopt a comprehensive new set of the Articles of Association of the Company (‘new articles’) in substitution of the existing AOA. The resolution to adopt the new articles was passed by the requisite majority by the members of the Company through a Postal Ballot and the result was announced on January 23, 2017. The new articles are available on the website of the Company. (

Disclosures Audit Committee

The Audit Committee comprises of Independent Directors namely Mr. M.B.N.Rao as the Chairman and Mr. Anand Narain Bhatia, Mr. V.Manickam and Dr. (Ms) Rca Godbole as Members.

CSR Committee

The CSR Committee comprises of Mr. V.Manickam, Independent Director as the Chairman and Mr. V.Ravichandran, Non-Executive Non Independent Director and Mr. V.Ramesh, Managing Director as members.

Vigil Mechanism & Whistle Blower Policy

The Company has a Vigil Mechanism for directors and employees to report genuine concerns and grievances and provides necessary safeguards against victimisation of employees and directors.

The Audit Committee reviews on a quarterly basis the functioning of the Whistle Blower and vigil mechanism. The Vigil Mechanism and Whistle Blower Policy have been posted on the Company’s website at www.eidparry. com and the details of the same are given in the Corporate Governance Report.

Business Responsibility Report (BRR)

The Listing Regulations mandate the inclusion of the BRR as part of the Annual Report for top 500 listed entities based on market capitalization. In compliance with the Listing Regulations, the BRR forms part of this Annual Report.

Dividend Distribution Policy

Pursuant to Regulation 43A of the Listing Regulations, the top 500 listed Companies shall formulate a Dividend Distribution Policy. Accordingly the policy was adopted by the board at its meeting held on February 07, 2017 to determine the distribution of dividend to its shareholders and / or retaining the profits earned by the company. The policy is available on the Company’s website at

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars relating to conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo as required to be disclosed under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in Annexure- D to this Report.

Loans, Guarantees And Investments

There were no loans and advances in the nature of loans to associate companies as well as to firms/ companies in which Directors are interested during the financial year 2016-17.

During the financial year, the Company had given guarantees and made investments in subsidiaries within the limits as prescribed under Sections 185 and 186 of the Companies Act, 2013. Details of loans, guarantees and investments are given in Annexure- E to this Report.

Credit Rating

During the year, rating agency CRISIL has reaffirmed its credit rating to the Company’s Long term Bank facilities and Debt Programmes to ‘CRISIL A / Stable’ and the “CRISIL A1 ” rating for its short term borrowing.

Particulars of Employees and Related Disclosures

The information required under Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Board’s Report for the year ended March 31, 2017 are given in Annexure - F to this Report.

Extract of Annual Return

The extract of the Annual Return of the Company in Form MGT-9 is given in Annexure - G to this Report.


Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Companies Act, 2013.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOP referred to in this Report.

The Managing Director and the Deputy Managing Director of the Company do not receive any remuneration or commission from any of its subsidiaries. No significant or material orders were passed by the Regulators or Courts or Tribunals, which impact the going concern status and Company’s operations in future.


The Board places on record, its appreciation for the cooperation and support received from investors, customers, farmers, suppliers, employees, government authorities, banks and other business associates.

On behalf of the Board

Place : Chennai A. Vellayan

Date : May 18, 2017 Chairman

Director’s Report